Climbing the property ladder

For many, buying their first home is a major achievement, but it’s rarely the “forever home.” As careers evolve and families grow, the need for a larger or different space often arises. Here’s how to successfully navigate moving up the property ladder:

Step 1: Assess your position

• Home valuation: Get your home valued by at least three estate agents to ensure accuracy. Ask them to explain how they arrived at their figures.
• Mortgage check: Review your current mortgage balance and term. Determine if it's portable if you have several years left.
• Equity calculation: Decide whether to sell your current home or keep it as an investment. Calculate the equity you can leverage for your next property.

Step 2: Set your target

• Define requirements: List what you want in your next home and prioritise your needs—e.g., is a south-facing garden more important than a new kitchen?
• Research areas: Investigate property types and average prices in your desired locations, considering factors like proximity to transport and schools.

Step 3: Create your savings plan

• Deposit target: Aim to save at least 20% of the new property's value for your deposit.
• Budget for costs: Account for legal fees, stamp duty, and moving expenses. Always set aside a contingency fund for unforeseen repairs.

Step 4: Optimise your savings

• Savings accounts: Utilise high-interest savings accounts or short-term  cash savings bonds.
• Mortgage offset: Consider an offset mortgage to reduce interest payments and build equity faster.

Step 5: Boost your borrowing power

• Credit score improvement: Regularly check and improve your credit score.
• Overpayments: Consider overpaying on your current mortgage to increase equity.

Step 6: Time your move

• Market awareness: Watch the property market and interest rates. The market tends to slow down in winter, which can be a good time to make offers.
• Acting on opportunities: Be prepared to act when conditions are favourable.

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Funding your child’s education

Education can be a significant financial commitment, whether you're covering private school fees, university costs, or extracurricular activities. Here’s how to effectively save for your child's education:

Step 1: Estimate the costs

• Research fees: Investigate current and projected costs for schools and universities, factoring in annual increases of 3-5%.

Step 2: Set your timeframe

• Funding timeline: Determine when you'll need the funds, whether it's for school in five years or university in 18 years.

Step 3: Choose your savings vehicles

• Short-term options: For savings needed in 5-10 years, consider cash ISAs or fixed-rate bonds.
• Long-term investments: For longer horizons, explore Stocks and Shares ISAs or Junior ISAs.

Step 4: Create a regular savings plan

• Direct debits: Set up monthly contributions to your chosen accounts, aiming to cover at least 75% of projected costs through savings.

Step 5: Explore additional funding options

• Scholarships and bursaries: Research available funding opportunities.
• Funding strategies: Consider how much you'll contribute through income or loans when necessary.

Step 6: Review and adjust regularly

• Annual Reassessment: Review your savings plan each year and adjust contributions to keep pace with inflation and fee increases.
  

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Planning for early retirement

The FIRE (Financial Independence, Retire Early) movement encourages individuals to save aggressively to retire well before the state pension age. If that appeals to you, here’s how to plan for an early retirement:

Step 1: Define your early retirement

• Target age: Decide on your ideal retirement age based on your lifestyle and career goals.
• Desired income: Estimate how much income you'll need, aiming for 25 times your expected annual expenses.

Step 2: Assess your current position

• Pension review: Calculate your current pension pot and growth projections, including your State Pension forecast.
  

Step 3: Identify the shortfall

• Gap analysis: Determine the difference between your current savings trajectory and your retirement goals, considering inflation and market fluctuations.

Step 4: Maximise your pension contributions

• Employer benefits: Take full advantage of workplace pensions, especially if your employer offers matching contributions.
  

Step 5: Diversify your retirement savings

• Flexible savings: Utilise ISAs for tax-efficient savings and consider property or managed funds for additional growth.
  

Step 6: Create additional income streams

• Passive income: Explore rental properties or dividend-paying investments.
• Part-time work: Consider how part-time work can supplement your income in early retirement.

Step 7: Optimise your investments

• Portfolio review: Regularly assess and rebalance your investment portfolio, gradually shifting to lower-risk assets as you approach retirement.
  

Step 8: Plan for healthcare costs

• Health insurance: Consider private health insurance or establish a healthcare fund for potential long-term care expenses.

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Conclusion

Saving for life’s major milestones requires careful planning, discipline, and adaptability. By breaking down your financial goals into actionable steps, you're not just dreaming about your future; you’re actively shaping it.

These plans are flexible; life can be unpredictable, and successful savers adapt their strategies to accommodate changes. Regularly reassess and adjust your plans, seeking professional advice when needed.

Whether you’re aiming for your dream home, securing your child's educational future, or planning for early retirement, the key is to start early and remain committed. With these strategies, you’re well on your way to achieving your financial aspirations.

What is the Prize Savings Account? 

Our Prize Savings Account is an instant access savings account, where instead of earning interest, your cash deposits give you entries into a monthly draw to win tax-free¹ prizes paid directly into your account.

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Is it free to enter?

Yes! Entries are completely free of charge, all you need to do to enter is deposit and hold an average balance of at least £100 at the end of the month. 

Note - from 1 December 2025 onwards you will only need to hold a minimum average balance of £10. 

Every £10 of average balance gives you one entry in the monthly draw.

But to be clear; entries don’t cost you anything, and any money that you deposit can be instantly withdrawn whenever you want (but note that you will lose entries in the monthly draw).

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Is it a normal instant access savings account?

The Prize Savings Account is an instant access savings account with instant deposits and withdrawals.

It is powered by our partner bank ClearBank, and all deposits are ultimately held by them and covered by the Financial Services Compensation Scheme (FSCS) up to £120,000 (see our ‘how we protect your money’ webpage to learn more about FSCS at Chip). 

The only difference between the Prize Savings Account and any other savings account is that instead of earning interest, you will have a chance to win tax-free¹ prizes.

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How much can I save?

The maximum amount of cash you can save into the Prize Savings Account is £85,000. Any prizes won are paid as ‘bonus’ and are paid directly into your Prize Savings Account, and don’t count towards the £85,000 balance limit. 

It is not possible to deposit more than this amount, or to open multiple accounts in order to do so. Any attempt by an individual to open multiple accounts would result in a breach of the Prize Savings Account terms and conditions.

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What are the prizes?

All prizes are tax-free¹ sums of ‘bonus money’ we pay directly to your Prize Savings Account.

The prize amounts can change each month and we’ll publish next month’s prizes on this site no later than five calendar days before the start of the next draw. 

We commit to always paying at least one Grand Prize of £10,000 and 250 ‘additional prizes’ of £10. Though, generally we pay much more than this!

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What’re the odds of winning?

We can’t be exact with the odds of the next draw, as it depends on how many people enter and how many prizes are awarded. But we can share past odds. Please also note that you can win more than one prize per draw.

The odds of winning per entry (per £10 deposit) in the September 2025 draw were:

• 1 in 623 to win any prize

The average odds of winning per entry (per £10 deposit) in all 2025 draws were:

• 1 in 964 to win any prize

Data is based on January - September 2025.

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Are prizes tax free?

All prizes are tax-free sums of ‘bonus money’ we pay directly to your Prize Savings Account.

But note that Chip does not provide tax advice, and tax treatment depends on individual circumstances and may be subject to change in the future.

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‍Can I win more than one Prize? 

Yes you can. You can win multiple tax-free prizes in the draw. 

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When are the prizes paid?

If you win an ‘additional prize’, it will be added to your Prize Savings Account within five working days after the start of the month (but we aim to do this as close to the 1st of the month as we can). 

If you win the Grand Prize, we will contact you before it is paid (see below).

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What happens when you win the Grand Prize?

Grand Prize Winners need to confirm their win before the prize is paid. 

We will contact you by email and call you. You’ll have seen the recordings of these calls on our social media accounts. 

We will also ask you to take part in reasonable publicity, like being interviewed and filmed. We will obtain your express consent before filming and/or sharing any media. 

Winners have 10 working days to respond to us and claim their prize (we reach out by email, push notification and phone, leaving voicemails and even SMS).

If we can’t reach the Grand Prize winner, the prize will be deemed forfeit and the amount will be added to the following month’s prizes (i.e. like a ‘rollover’). 

For example, if a winner wins a Grand Prize of £10,000 in January but does not claim it, the Grand Prize available in February’s draw (for this example, also £10,000) would become the value of both January and February’s Grand Prizes combined (i.e £20,000).

Rest assured, we make every effort to contact the Grand Prize winner and we haven’t had a single Grand Prize unclaimed yet!

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How are the prizes awarded?

Prizes are paid as a bonus, not cash, directly into your Prize Savings Account.  

Please note, the prizes do not become cash until your full Prize Savings Account balance is withdrawn back to your current account, or if you transfer your balance to another account in Chip. Also note, when withdrawing prizes to your linked bank account, this can take up to five working days.

Prizes also do not count towards additional entries, unless you withdraw and redeposit. Prizes are not FSCS protected until they are withdrawn and redeposited.

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How do you enter?

Each month you will be entered into the prize draw provided you have an average balance of £10 or above in the Prize Savings Account (and have not opted out).

Every full £10 of average balance = one entry. 

The average balance you have on 11:59pm on the last day of the calendar month is what gets counted as your entries.

For example, if you have an average balance of £10 on 11:59pm on the last day of the calendar month you’d get 1 entries each calendar month (unless you opt out).  

If your average balance drops below £10, and remains at that level at the end of the calendar month, you’d have 0 entries in that month’s prize draw (if you choose to opt out of the draw, you’ll have 0 entries, regardless of your balance).

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How does average balance work?

Before we get into the detail of how average balance works, the important things to take away are:

• The earlier you deposit in the month the more entries you get.
• In the month after you deposit, every £10 of your balance = one entry in the draw (provided you don’t withdraw).
• Use the calculator to see how many entries you’ll get.

Your average balance is calculated by your daily balance divided by the number of days in the month. 

When are my entries counted?

Your entries will be taken at the end of the calendar month, but the draw will take place in the first week of the following month (no later than five working days after the end of the calendar month). 

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Where can I see my entries?

You can see your entries in your app, on the Savings tab under “Prize Savings Account” 

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Can I get extra entries?

You can occasionally earn extra entries through promotional offers. You might be able to double your entries, or earn entries for completing actions like referring a friend.

These are one-off promotions and will have their own eligibility and terms and conditions. Extra entries can count above the deposit cap of £85,000 (8,500 entries)

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How and when are the winners picked?

The draw will take place within five working days after entries close (the first five working days of the following month). Winners are selected using randomised draw software. 

The Grand Prize winner will be paid within 5 working days of them accepting the prize (see above), and we aim to pay ‘additional prize’ winners within the same timeframe, but it’s normally much quicker.

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Can I autosave into this account?

Yes, you can autosave directly into this account (Savings Plans settings can be found on the profile tab) and also deposit one-off amounts at any time by selecting the Prize Savings Account in the Savings tab and tapping ‘deposit’. Saves into this account also count toward your in-app savings goals that you can set up in the ‘Goals’ tab.

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Is this gambling or a lottery? Can I lose money?

The Prize Savings Account is not a lottery or gambling and it’s completely free to enter. You can’t lose money. You are depositing money in a FSCS protected account for the chance to win prizes. You can withdraw for free at any time.

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Can I open a Prize Saving Account for my child?

Unfortunately not, The Prize Savings Account is only available to the named individual who must be a UK resident over 18 years of age.

What is a Cash ISA?

A cash ISA, short for Cash Individual Savings Account, is similar to a conventional savings account. However, its distinctive feature is the exemption from taxation on the interest earned.

In each UK tax year (which runs from April to April), you can deposit up to £20,000 into a cash ISA.

ISA savings are in addition to the Personal Savings Allowance (PSA), which permits basic rate taxpayers to earn up to £1,000 in savings interest annually without incurring tax liabilities.

Higher rate taxpayers (40% tax rate) qualify for a reduced PSA of £500 per year, while additional taxpayers earning £150,001 or more do not receive any allowance.

ISA limits apply. £20k per tax year. Chip does not provide tax advice or financial advice. Tax treatment depends on individual circumstances and may be subject to change in the future.

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How do Cash ISAs Work?

If you're thinking about using a cash ISA to grow your savings, here's a brief overview of how they work:

• Cash ISAs are typically easy to open.
• You can save up to £20,000 annually, and your account accrues interest similar to a standard savings account.
• A variety of cash ISAs are available, such as easy access, regular saver, fixed rate, and junior ISAs for individuals under 18.
• Different ISAs may have varying terms, including withdrawal restrictions on fixed rate cash ISAs.
• Transferring funds from previous tax years into a higher-yield ISA account is possible. Avoid closing an ISA when switching; instead, contact your new ISA provider to facilitate the transfer.

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Interest Rates on Cash ISAs

The interest rate depends on the type of cash ISA and the chosen provider. Fixed rate cash ISAs offer a guaranteed return for a set period, whereas variable rate cash ISAs may change if the provider adjusts its interest rates.

Use our interest rates calculator to see how much you could earn. 

Cash ISA interest rates can vary between financial providers, so it’s always good to do your research with comparing Cash ISA rates.

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Cash ISA factors to think about

Before opening a cash ISA, consider the following factors:

1. Interest Rate: The interest rate determines your savings' returns. Be aware that initial high introductory rates may decrease after a year, so consider transferring your ISA funds to a higher-yielding account at that point.

2. Account Type: Choose between easy access, fixed, or regular saver ISAs based on your preferences for return and accessibility.

3. Alternative ISAs: Apart from cash ISAs, you can explore stocks and shares ISAs. These involve investing in the stock market, offering potential rewards but also bearing some level of risk.

4. Annual Limit: You can open only one cash ISA each year. Think carefully before selecting your cash ISA, keeping in mind that your total ISA savings can't exceed £20,000 in any tax year.

5. Deadline: The tax year concludes on April 5th. Any unused ISA allowance cannot be carried over, so invest before this date to maximise your tax-free benefits.

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How Many Cash ISAs Can I Have?

You can have multiple ISAs, but you can only deposit a maximum of £20,000 in a given tax year.

Be aware that transferring funds from previous years' ISAs does not count towards this limit.

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Cash ISA Rules

Cash ISA rules are straightforward:

• You can deposit a maximum of £20,000 per tax year.
• Transfers from existing cash ISAs to new cash ISAs or splitting transfers among different providers are allowed.
• To switch between cash ISA providers, you must request a transfer. If you withdraw the money yourself, you'll lose your tax-free allowance on the entire sum.
• You can transfer money from a stocks and shares ISA to a cash ISA, but this requires a form to be submitted to the new provider (but please note you can't currently do this with Chip).

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Pros and Cons of Cash ISAs

Pros of cash ISAs:

• Tax-free savings.
• No risk of capital loss compared to stocks and shares ISAs.
• Flexibility to transfer to higher-yield accounts while retaining tax advantages.

Cons of cash ISAs:

• High interest rates may drop after the first year.
• Fixed rate cash ISAs may lock your money for a set period.
• Not all accounts accept transfers from previous years, and exit fees may apply.

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Switching Cash ISAs

Switching could be considered if you find an account offering a higher interest rate. Ensure the new provider accepts transfers and inquire about any penalties for moving your funds.

You can transfer savings from both the current and previous years. It may also be possible to request a partial cash ISA transfer however not all providers can facilitate this.

Avoid closing the ISA, as this would result in losing the tax benefits. Instead, contact the new provider to arrange the transfer.

What are the biggest companies in Japan by market cap?

This list ranks the biggest public companies in the Japanese market by market capitalisation. We’ll also highlight other key figures, such as revenue, gross profit, and 1-year return. Key facts like the company's exchange, founding year, and country are also covered.

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1. Toyota Motor Corp. 

• Market cap: $246.8 billion
• Revenue: $329.03 billion
• Gross profit: $63.5 billion
• 1-yr return: +14.38%
• Exchange: TSE
• Year founded: 1937
• Country: Japan

Designs, produces, and sells a wide range of vehicles across several brands. Their philosophy is key to their success, focusing on eliminating waste and continuous improvement (“kaizen”). This has built them a reputation for quality and long-term reliability. 

• Automotive sales: Largest source of revenue generated from sales of their core Toyota brand, their luxury division Lexus, and other brands like Daihatsu (small cars) and Hino (trucks). 
• Hybrid technology: pioneer of hybrid tech with the iconic Prius, with future strategy focusing on a diverse approach to electrification, and investment in next-gen electric cars and solid-state batteries. 

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2. SoftBank Group Corp. 

• Market cap: $194.89 billion
• Revenue: $25.74 billion
• Gross profit: N/A
• 1-yr return: +137.88%
• Exchange: TSE
• Year founded: 1981
• Country: Japan

A multinational conglomerate holdings company renowned for making huge, bold investments in the world’s boldest and most innovative tech companies.

• Vision fund: one of the world’s largest venture capital funds, with multi-billion dollar investments in late-stage startups and public companies across sectors like Artificial Intelligence (AI), biotech, and fintech.
• Arm holdings: its most valuable asset is its huge stake in the British firm that designs chips for most of the world’s smartphones, whilst maintaining interests in telecommunications and other technology assets. 

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3. Mitsubishi UFJ Financial Group 

• Market cap: $174.52 billion
• Revenue: $81.70 billion
• Gross profit: $8.28 billion
• 1-yr return: +59.18%
• Exchange: TSE
• Year founded: 2001
• Country: Japan

Japan’s largest bank and one of the world’s leading full-service financial institutions.

• Retail and commercial banking: serving millions of customers and businesses across Japan through its main banking unit, MUFG Bank, offering a full suite of services from deposits and loans to wealth management.
• Corporate and investment banking: provides large-scale financing, treasury, and securities management services to multinational corporations and institutional investors globally. 

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4. Sony Group Corporation

• Market cap: $171.37 billion
• Revenue: $85.36 billion
• Gross profit: $25.13 billion
• 1-yr return: +60.77%
• Exchange: TSE
• Year founded: 1946
• Country: Japan

A huge Japanese conglomerate that has evolved from a legendary electronics maker into a global entertainment and technology giant. 

• Entertainment empire: Sony Gaming produces the iconic PlayStation, Sony Music is one of the world’s largest record labels, and Sony Pictures produces major Hollywood films and TV.
• Technology: leader in high-end consumer electronics like Bravia TVs and Alpha camera, but its most critical business is imaging and sensing solutions, where it is a world leading manufacturer of the camera sensors used in a majority of smartphones, including the iPhone. 

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5. Hitachi Ltd.

• Market cap: $130.93 billion
• Revenue: $85.36 billion
• Gross profit: $19.29
• 1-yr return: +18.35%
• Exchange: TSE
• Year founded: 1980
• Country: Japan

An industrial conglomerate that’s evolved from a heavy industry giant to a technology leader focused on IT and social industry.

• Digital systems and services: IT solutions for its business customers focusing on data storage, AI, and its ‘Lumada’ Internet of Things platform (connects physical machinery to digital analytics).
• Green energy, mobility and connective industries: build and maintain critical infrastructure, from high speed rail, power grids, construction machinery and advanced automotive components.

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6. Sumitomo Mitsui Financial Group 

• Market cap: $104.08 billion
• Revenue: $64.18 billion
• Gross profit: N/A
• 1-yr return: +33.19%
• Exchange: TSE
• Year founded: 2002
• Country: Japan

One of Japan’s largest ‘megabanks’, SMFG is a major global financial institution and holdings company that operates globally in retail, corporate, and investment banking.

• Sumitomo Mitsui Banking Corporation: the group's main subsidiary, providing retail and commercial banking services to millions of individual customers and corporate clients across Japan.
• Corporate and investment banking: serves multinational clients with project financing and trade finance, alongside its securities division, SMBC Nikko Securities, which handles brokerage and underwriting. 

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7. Nintendo Co.

• Market cap: $98.33 billion
• Revenue: $10.12 billion
• Gross profit: $5.04 billion
• 1-yr return: +65.57%
• Exchange: TSE
• Year founded: 1889
• Country: Japan

World famous pioneer of the video game industry. The mastermind behind the Wii, DS, Switch and a range of iconic games.

• Consoles and hardware: core focus of the business, having evolved from the iconic Nintendo 64 and GameCube, to the Switch and 3DS.
• Games: some of the world’s most valuable entertainment intellectual property, such as Super Mario, The Legend of Zelda, and Pokémon franchises, which are being expanded into movies and theme parks.

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8. Fast Retailing Co. 

• Market cap: $95.33 billion
• Revenue: $22.75 billion
• Gross profit: $10.80 billion
• 1-yr return: -2.63%
• Exchange: TSE
• Year founded: 1949
• Country: Japan

Global fashion retail holding company that owns big names such as UNIQLO, GU, Theory and Helmut Lang.

• UNIQLO: core business offering, operating thousands of stores worldwide. They focus on producing high-quality, functional and affordable basic apparel for a mass audience.
• Other brands: focus on greater affordability through GU, and more premium offering through Theory.

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9. Keyence Corporation 

• Market cap: $92.19 billion
• Revenue: $7.27 billion
• Gross profit: $6.08 billion
• 1-yr return: -12.61%
• Exchange: TSE
• Year founded: 1972
• Country: Japan

A global leader in the development and manufacturing of factory automation sensors, measurement systems, and other industrial electronics.

• Tech: its core business involves creating high-tech products like sensors, vision systems, and laser markers that are essential for automating production lines in industries such as automotive, electronics, and food packaging.
• Sales: the company is renowned for its unique direct-sales business model, where a highly-trained salesforce works directly with customers on-site to solve complex engineering problems, leading to exceptionally high profit margins and a deep understanding of market needs.

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10. Mitsubishi Corporation

• Market cap: $88.25 billion
• Revenue: $123.26 billion
• Gross profit: $11.27 billion
• 1-yr return: +15.42%
• Exchange: TSE
• Year founded: 1950
• Country: Japan

Japan’s largest general trading company, Mitsubishi is a vast conglomerate that trades in nearly everything and acts as a major global investor.

• Commodities and products: traditional business trades everything from sourcing and distributing energy, metals and chemicals to food and machinery.
• Strategic investor: takes significant ownership stakes in businesses and develops large-scale industrial projects, such as power plants, mining operations, and retail enterprises around the world.

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What are the biggest companies by total annual revenue?

• Toyota Motor Corp.: $320.52 billion 
• Honda Motor Co Ltd.: $144.71 billion 
• Mitsubishi Corporation: $124.23 billion 
• Itochu Corporation: $98.18 billion 
• Mitsui & Co Ltd.: $97.78 billion

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What are the biggest companies by workforce?

• Toyota Motor Corp.: 383,850
• NTT Inc.: 341,320 
• Sumitomo Electric Industries Ltd.: 288,140
• Hitachi Ltd.: 282,740 
• Japan Post Holdings Ltd.: 218,720

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Summary

Understanding a company's performance is crucial; it's how you truly know what you own. These metrics directly drive the value of your stocks and funds. When you understand these key drivers, you can navigate market changes with confidence, rather than just reacting to headlines.

Next we’ll be looking at the biggest companies in the USA by market cap.

All market data sourced from TradingView and company reports as of 06.10.2025.

An Instant Access Account is a type of savings account that allows you to deposit and withdraw your money whenever you need it, without incurring any penalty charges. 

It is an easy-to-use and flexible savings option that generally offers a higher interest rate than a standard current account.

In the UK, Instant Access Accounts are offered by various banks, building societies and other financial providers. They can be opened online, over the phone or in person at a branch (depending on the provider).

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What are the benefits of an instant access Account?

1) Flexibility

One of the main benefits of an Instant Access Account is its flexibility. 

You can deposit or withdraw money from the account whenever you need it, usually without any restrictions or penalties. This makes it a great option for those who need easy access to their savings.

2) Competitive interest rates

Instant Access Accounts usually offer a higher interest rate than standard current accounts, which means you can earn more money on your savings.

However, the interest rate is generally lower than fixed-term savings accounts, which require you to lock your money away for a set period of time. Different types of savings accounts.

3) No penalties

Unlike some other savings accounts, there are usually no penalties for withdrawing money from an Instant Access Account. You can usually make as many withdrawals as you like, without incurring any charges. 

This does, however, depend on the savings account provider and their terms and conditions of the account. 

4) Protection

Your savings in an Instant Access Account are protected by the Financial Services Compensation Scheme (FSCS), which means that if the bank or building society held in the UK goes bust, you will be protected up to £120,000 per person, per institution. 

Please note that FSCS is subject to eligibility and limits apply. For more information, please visit: https://www.fscs.org.uk/check/ 

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How to choose the right Instant Access Account?

When choosing an Instant Access Account, it’s important to compare the interest rates offered by different banks and building societies.

You should also consider any additional features, such as charges that may or may not apply.

It’s also important to check whether the bank or building society is covered by the Financial Services Compensation Scheme, which provides protection for your savings in the event of the institution going bust.

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Instant Access Account Summary

In conclusion, an Instant Access Account is a flexible and convenient savings option that offers competitive interest rates and easy access to your funds.

It’s a great choice for those who need to save money but also need access to their funds whenever they need it. 

By choosing the right Instant Access Account, you can make your money work harder for you, while also enjoying the peace of mind that comes with knowing your savings are protected under FSCS (subject to eligibility)

Remember to always do your research when comparing instant access accounts and that you’re fully aware of any terms of conditions when opening an account with a provider.

What is a workplace pension? 

A workplace pension is a scheme set up by an employer to provide retirement benefits for its employees. A percentage of your pay is put into the pension scheme automatically every payday.

In most cases, your employer also adds money into the scheme for you, and the government adds tax relief.

This means that for every £100 that lands in your pension pot, it might only cost you £50 or £60 from your take-home pay; which can really add up long term.

Read our full guide on pensions tax, relief and allowances.

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The two core types

While there are many different names for pension schemes, almost all of them fall into two main categories based on how the money is calculated. 

What are defined contribution pensions?  

Most modern workplace pensions are Defined Contribution (DC) schemes. You and your employer pay into a ‘pot’. This is invested market into different assets such as shares, bonds and property

The amount you get out at the other end when you retire, depends on how much was paid in and how well the investments within your pot performed. The final amount is not guaranteed.

What are defined benefit pensions? 

These are sometimes called ‘final salary’ or ‘career average’ schemes. They are now a rare find in private sector employment (though you may have one from an older job)  but remain common in the public sector e.g. the NHS. 

Under defined benefit schemes, employers promise to pay you a specific income for life when you retire. The amount is calculated based on a combination of your salary and years of service. The investment risk is held by the employer, not you. 

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How workplace pensions are structured

Behind the scenes, workplace pensions are set up in different legal ways. They are generally split into occupational (trust-based) schemes and group (contract-based) schemes.

Occupational pensions 

In occupational pension schemes, the pension is held in a trust and looked after by a board of trustees who have a legal duty to look after the members’ interests.

What is a company pension scheme? 

Historically, large companies ran their own pension trusts. Today, most modern ‘company pensions’ are actually master trusts (like Nest, The People’s Pension, or NOW: Pensions).

These are large multi-employer trusts that run the pension scheme on behalf of many different businesses.

What is an auto-enrolment pension scheme? 

Auto-enrolment is not a pension product in itself, but the government rules that determine who must be enrolled and what minimum contributions apply.

The pension your employer uses to fulfil this obligation will be one of the scheme types listed above.

Under Automatic Enrolment, employers must enrol eligible staff (aged 22 to State Pension age, earning at least £10,000) into a pension scheme.

These rules ensure there is a minimum contribution of 8% of qualifying earnings — 3% from the employer and 5% from the employee.

What is a SSAS pension? 

A Small Self-Administered Scheme (SSAS) is a niche type of occupational pension, usually set up by the directors of a small business.

A SSAS offers significant flexibility, allowing the pension to loan money to the employer for business costs, or to buy the company’s commercial premises directly in a tax-efficient way.

These schemes are generally a tool for business owners, not employees. 

Group pension schemes 

In these schemes, the employer hires a pension provider, but the contract is legally between you (the employee) and the provider.

What is a standard group pension?  

Also known as a Group Personal Pension (GPP), this is the most common type of private sector pension. The employer chooses a provider (like Aviva, Royal London, or Scottish Widows) to run the scheme. The provider claims tax relief for you and manages the investments. 

What is a group SIPP?  

A group Self-Invested Personal Pension (SIPP) is a GPP with added flexibility. A standard GPP generally offers a limited choice of funds, a group SIPP allows employees to choose their own investments, often including individual shares. 

What is a group stakeholder pension?  

Stakeholder pensions were introduced by the government in 2001 as a simple, low-cost option with capped fees and flexible contributions.

They have largely been replaced by modern GPPs and Auto-enrolment schemes, but some older schemes still exist.

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Other key concepts

What is salary sacrifice? 

Salary sacrifice is a way to structure your pension contributions to save tax. You agree to sacrifice a portion of your salary in exchange for your employer paying the same amount into your pension as their contribution.

Because this technically makes your salary lower, you pay less National Insurance (and so does your employer). You end up with the same amount in your pension, but your take home pay is slightly higher. 

From April 2029, NI relief on salary sacrifice pension contributions will be capped at £2,000 per year. Contributions above this will attract National Insurance for both you and your employer. Income tax relief on contributions is unaffected.

Worth knowing: 

• Salary sacrifice reduces your official contractual salary, which can have knock-on effects in a few areas. Mortgage lenders use your contractual salary when assessing affordability, so a heavily sacrificed salary could affect how much you can borrow.
• Statutory payments such as maternity and paternity pay are also calculated on your reduced salary. If your life insurance or death-in-service cover is linked to your salary, this may be lower too. If any of these apply to you, it's worth weighing up the NI saving against the potential impact before committing.

What are public sector pensions? 

These are the pension schemes for workers in the NHS, Civil Service, Teachers, Police, and Armed Forces.

• These are almost always Defined Benefit schemes.
• Unlike private pensions which have a ‘pot‘ of money, most public sector schemes are ‘unfunded’This means there is no central pot; the pensions of retirees today are paid for by the contributions of workers (and taxpayers) today. 

What is an AVC? 

An Additional Voluntary Contribution (AVC) is a way to top up your workplace pension.

• If you’d like to save more than the standard amount, you can pay extra into an AVC pot attached to your main scheme.
• Why use it? AVCs are particularly popular for people in Defined Benefit schemes who want to build up a separate pot of cash to take as a tax-free lump sum, without reducing their guaranteed annual income. 

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Private pensions

Workplace pensions are fantastic for employees, but if you’re self-employed or want to save more than your workplace scheme allows; a private pension could be for you.

There are several options for private pensions depending on who you are, and how much freedom you want to choose your investments. The next guide will go through the possible options and how they work.

We all have financial goals. Whether you're aiming for early retirement, paying off your mortgage, or growing your pension, the path to success depends on more than just numbers. 

It's about mindset. Managing money isn’t just about budgeting or resisting impulse buys; it’s about understanding your relationship with money. 

So, with that in mind, let’s explore some psychological strategies and simple tricks to help keep you on track with your savings goals.

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Discover your money personality

Each of us has a unique relationship with money, influenced by upbringing, experiences, and even cultural shifts. Some people naturally save, always preparing for the future. Others tend to spend impulsively, enjoying life in the moment.

To understand your money personality, reflect on how your family viewed money growing up.

Did your parents or friends have the same financial habits as you? Acknowledging your financial background can be eye-opening.

For example, in the 1980s, the average age of marriage in the UK was 25, while today it’s 34. Similarly, first-time homebuyers were 28 on average in the '80s, but now the typical age is 34.

These shifts mean our financial expectations have changed dramatically, but our attitudes may not have kept pace.

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Visualise your financial success

Imagine yourself in 10 years, living your dream life – perhaps you’re mortgage-free, retired early, or taking monthly holidays.

Visualisation is a powerful tool and can help turn long-term goals into daily motivators.

Create a vision board, save goal-related images on Pinterest, or stick a picture of your future dream on your fridge. Keeping these visuals front and centre will reinforce your motivation to stay committed to your financial journey.

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Break it all down

Achieving financial freedom doesn’t happen overnight – it requires small, consistent actions. Breaking down your big savings goal into manageable steps makes the journey less overwhelming.

Celebrate each milestone, whether it’s saving your first £1,000 or hitting 25% of your target. Each victory boosts your motivation and reinforces positive habits.

And, if you slip up or miss a goal, don’t beat yourself up. Life happens – what matters is bouncing back and focusing on the next milestone.

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Master delayed gratification

In a world of instant gratification, learning to delay is a game-changer. When faced with an impulse purchase, take a pause. Ask yourself how it will (or could) impact your future.

Your Chip app can help with this by showing you how far you’ve come, and what’s still ahead. If impulse control isn’t your strong suit, budget a little "fun money" each month. This way, you’re not depriving yourself, you’re just adding a delay to your gratification.

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Automate your savings

Set it and forget it. Automation is one of the easiest ways to grow your savings without thinking about it. Set up automatic transfers to your savings or investment accounts as soon as you get paid. This way, you learn to live off what’s left, while your wealth grows in the background.

Also, perhaps think about keeping push notifications on for your money apps so you can celebrate small wins when deposits are made. This can be a great daily reminder of your progress.

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Surround yourself with support

Money talk doesn’t have to be taboo. Surround yourself with friends or communities that share your financial goals. Whether it’s a local investment club or an online group, sharing ideas and strategies can keep you inspired and accountable.

Social media can be a great resource for connecting with others who are saving for similar goals. You can learn from their mistakes and successes, while also building a support network for those inevitable tough moments.

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Keep learning

Financial knowledge is empowering. Always try to keep learning, whether it's mastering tax laws, exploring different types of investments, or brushing up on budgeting tips. Staying informed can help you make smarter decisions and ensure you stay in control of your financial future.

Mastering your money mindset isn’t just about controlling impulse buys or following a rigid budget. It’s about aligning your financial actions with your long-term goals.

Every small step you take today is building a brighter future for yourself. Remember, the journey to financial freedom is uniquely yours. Celebrate each win, embrace the process, and keep your eye on the prize.

With the right mindset and tools—like the Chip app—your financial future can become more than just a dream.

What is a private pension? 

A private pension is a pension you build yourself, separate from your workplace pension. tIn most cases only you contribute, though limited company directors can also receive employer contributions from their own company."  Either way, you’ll still receive tax relief on qualifying contributions and you decide how much to pay in and where the money is invested.

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The main types of private pensions

‘Private’ or ‘personal’ pension is often used as a blanket term for all of these options, there are actually three distinct types of pension ‘wrappers’. They all offer the same tax-relief, they differ in fees, investment choice and flexibility.

What is a personal pension?

Sometimes called a standard personal pension, this is the most common off-the-shelf option offered by large providers such as Aviva, Royal London etc. 

• You pay into a pot which is invested in a range of funds managed by the provider. 
• It’s a straightforward option for those who want a hands-off approach, as the provider handles your investments based on your risk profile.
• You’ll have less control and a narrower choice of investments compared to a Self-Invested Personal Pension (SIPP).

What is a stakeholder pension?

A stakeholder pension is a specific type of personal pension that has to meet strict government rules around fairness and accessibility.

• Providers can charge a maximum of 1.5% (drops to 1% after 10 years), and they must accept low minimum contributions (£20). 
• They are a popular choice for people on lower incomes or those who need to stop and start payments frequently without penalties.

What is a SIPP?

We’ve already covered the Self-Invested Personal Pension, but here’s a quick reminder in the context of other private pensions. 

This is the ‘DIY’ version of a personal pension, where you can select your investments yourself and have full control over your investment decisions. You typically aren’t limited to a standardised set of investment options, you can choose what works for you, and keep full oversight.

What is a junior SIPP?

A junior SIPP is a tax-efficient way to save for a child’s retirement. A parent or guardian can open the account, but the money belongs to the child.

You can pay up to £2,880 a year into the account. The government adds tax relief of £720 to this bringing the total to £3,600. The child cannot access the money until they reach age 55 (rising to 57 in 2028). 

What is a Lifetime ISA? 

A Lifetime ISA (LISA) is not technically a pension, but it is often used as an alternative for self-employed people. 

• You can save or invest up to £4,000 a year, and the government adds a 25% bonus (up to £1,000 free). 
• You must open a LISA before your 40th birthday, and can only continue making contributions until age 50. 
• You can withdraw the money tax-free after age 60. If you take it out earlier (unless buying a first home), you pay a 25% penalty. Note that the 25% penalty claws back more than just the government bonus — on a £100 contribution you'd receive £125 with the bonus added, but the penalty takes £31.25, leaving you with just £93.75. You effectively lose a small portion of your own money, not just the bonus. 
• Pension vs LISA: A pension is often preferred by higher-rate taxpayers (because you get 40% relief), while a LISA can be excellent for basic-rate taxpayers who want tax-free access at 60.

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Private pensions for the self-employed

If you’re self-employed your income may fluctuate, and pension saving can seem daunting if you’re unable to commit to a fixed monthly Direct Debit. A SIPP can give you:

• Flexibility to adjust contributions to your pension. You can pay in lump sums when you have a good month, and pay nothing if you need to take a break.
• Full transparency and low fees make SIPPs a good option if you aren’t ready to invest immediately.

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Private pensions for a limited company director

If you run your own limited company, a good way to save is actually through employer contributions:

• Instead of paying yourself a salary (which is taxed) and then paying into a pension, your company pays directly into your pension.
• This counts as an allowable business expense. Your company saves Corporation Tax on the contribution, and you pay no Income Tax or National Insurance on the money entering your pot. 

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What age can I draw my private pension? 

Private pots are designed to support you in later life, so the government has set rules for when you can start withdrawing the money from your pension.

• Under current rules you can access your pension from age 55.
• From 6 April 2028, the minimum pension age will rise to 57.

This applies to almost all private pensions (SIPPs, stakeholder and personal). The main common exceptions are if you are unable to work due to serious ill health, in which case you may be able to access it earlier.

Also, if you joined certain pension schemes before 3 November 2021, you may have a 'protected pension age' allowing you to access that pension from 55 even after the 2028 change. 

Read our full guide on retirement ages.

What is a recession?

A recession is a significant decline in economic activity across the economy, lasting more than a few months. In the UK, it is commonly defined as two consecutive quarters of negative GDP (Gross Domestic Product) growth.

Recessions affect many areas of the economy such as employment, business profits and consumer confidence. While often seen as negative, they are a natural part of the business cycle and can set the stage for future growth. 

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What causes a recession to happen?

Several factors can contribute to a recession. These factors can include:

• High inflation: When prices rise too quickly, consumer spending can fall, slowing the economy.
• High interest rates: To combat inflation, central banks (like the Bank of England), may raise interest rates, which increases borrowing costs for businesses and households.
• Falling consumer confidence: When people become uncertain about the future, they tend to spend and invest less.
• External shocks: Events like global pandemics, geopolitical conflicts, or oil price spikes can disrupt economic activity.
• Financial market imbalances: Asset bubbles (rapid price rise above value) or debt crises can lead to sudden market corrections (a drop of more than 10% in an index's market value) that can ripple through the broader economy.

Often, it’s not one cause but a combination of several factors that can lead to a downturn at various stages of a recession. 

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How long do recessions last?

The length of an economic recession varies. Historically, UK recessions have lasted anywhere from a few quarters to several years. For example, the 2008 global financial crisis caused a recession that lasted around five quarters in the UK. 

However, economic recovery often begins before people realise, as confidence and spending start to pick up. 

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How does a recession affect investing?

Given how recessions have an immediate impact on the economy, a recession can affect various investment asset classes, including: 

• Stock market volatility: Share prices often fall as company earnings decline and investor sentiment weakens. 
• Bond markets: Government bonds may become more attractive as investors seek safer assets.
• Dividend cuts: Companies may reduce or suspend dividends to conserve cash.
• Property market: Housing prices may fall due to reduced demand and tighter credit conditions.
• Currency fluctuations: For example, the pound may weaken, especially if the UK economy is underperforming compared to others.

For investors, a recession can bring short-term losses, but it also creates long-term opportunities, particularly for those who remain calm and strategic. Understand investment risks and strategies. 

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How can investors prepare for a recession?

Preparation is key. There are various investment strategies investors can take into account. This includes: 

• Review your risk tolerance: Make sure you review the amount of loss you’re prepared to handle while making an investment decision.
• Diversify: Spread investments across different asset classes and sectors to reduce exposure to any single area.
• Maintain an emergency fund: Cash reserves help cover living expenses without needing to sell investments during downturns.
• Focus on quality: Strong companies with strong fundamentals and healthy balance sheets are more likely to survive and recover. 

Avoid trying to predict the exact timing of a recession. Instead, focus on building a resilient portfolio that can weather a range of outcomes.

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How to invest during a recession?

Investing during a recession can feel counterintuitive, but it can also be a time of opportunity. 

• Stay invested: Attempting to time the market often leads to missed gains when markets rebound.
• Look for undervalued assets: Prices may fall below their true value, offering long-term potential.
• Use pound-cost averaging: Regularly investing a fixed amount can help smooth out price volatility over time.

Remember, recessions don’t last forever. Markets typically begin recovering before the wider economy does.

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What are the risks of investing during a recession?

A recession brings economic uncertainty. For investors, it’s important to understand potential downsides:

• Increased volatility: Markets can swing widely in either direction. Learn about stock market basics.
• Company defaults: Some businesses may not survive, particularly those with high debt levels.
• Lower income: Investors relying on dividends or interest may see reduced payouts.

Risk cannot be avoided entirely, but it can be managed through careful planning, diversification and understanding the risks involved. 

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Recession and investing summary

Recessions are challenging, but not unusual. For new investors, understanding how they work, and how markets tend to react, is a key part of building confidence and resilience. 

By focusing on long-term goals and maintaining a diversified, risk-aware strategy, it’s possible to navigate economic downturns more effectively.

Up next, learn what liquidity is and how it can affect investors.